Logistics concept of district heating supply with woody biomass (wood chips) in the municipalities of Prijepolje and Mali Zvornik prepared for: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH DKTI- Development of a Sustainable Bioenergy Market in Serbia Bože Jankovića 39 11000 Beograd Prepared by: Dr. Damir Đaković Dr. Branka Gvozdenac Urošević Dr. Dragan Urošević May 2015 DKTI (GIZ) Programme "Development of sustainable bioenergy market in Serbia" Logistics concept of district heating supply with woody biomass (wood chips) in the municipalities of Prijepolje and Mali Zvornik TABLE OF CONTENTS LIST OF ABBREVIATIONS .............................................................................................................................................. 4 LIST OF FIGURES .......................................................................................................................................................... 7 1. EXECUTIVE SUMMARY ........................................................................................................................................ 8 2. INTRODUCTION AND OBJECTIVE OF THE STUDY ................................................................................................. 9 2.1 SERBIAN LAW REGARDING THE USE OF BIOMASS .......................................................................................... 9 2.2 PURPOSE OF THE STUDY ............................................................................................................................ 10 3. METHODOLOGY ................................................................................................................................................ 11 3.1 DESK RESEARCH ........................................................................................................................................ 11 3.2 INTERVIEWS .............................................................................................................................................. 11 3.3 ASSESSMENT OF AVAILABLE WOODY BIOMASS .......................................................................................... 11 3.4 MODELING LOGISTICS OF BIOMASS SUPPLY CHAIN .................................................................................... 12 4. STAKEHOLDERS IN BIOMASS SUPPLY CHAIN ..................................................................................................... 13 4.1 ANALYSED MUNICIPALITIES ....................................................................................................................... 14 4.1.1 Prijepolje ............................................................................................................................................... 14 4.1.2 Mali Zvornik .......................................................................................................................................... 15 4.2 SURVEY OF DISTRICT HEATING SYSTEMS FOR ANALYSED LOCATIONS .......................................................... 16 4.2.1 District heating system in Prijepolje ....................................................................................................... 16 4.2.2 District heating system in Mali Zvornik .................................................................................................. 22 4.3 WOODY BIOMASS SUPPLY ......................................................................................................................... 27 4.3.1 Potential of woody biomass in Prijepolje municipality ............................................................................ 28 4.3.2 Potential of woody biomass in Mali Zvornik municipality ....................................................................... 34 4.4 WOOD CHIPS PRODUCERS ......................................................................................................................... 38 4.4.1 Wood chips producers in Prijepolje municipality .................................................................................... 39 4.4.2 Wood production companies in Mali Zvornik municipality...................................................................... 42 5. MODELLING OF A BIOMASS SUPPLY CHAIN ...................................................................................................... 49 5.1 BACKGROUND DATA AND INFORMATION .................................................................................................. 49 5.2 COSTS ESTIMATION IN BIOMASS SUPPLY CHAIN ......................................................................................... 51 5.3 DESIGNING POTENTIAL BIOMASS SUPPLY CHAIN MODELS .......................................................................... 54 5.3.1 Designed Model No. 1 ........................................................................................................................... 56 5.3.2 Designed Model No. 2 ........................................................................................................................... 57 5.3.3 Designed Model No. 3 ........................................................................................................................... 57 5.3.4 Designed Model No. 4 ........................................................................................................................... 57 5.4 DESIGNED POTENTIAL BIOMASS SUPPLY MODELS ...................................................................................... 58 5.4.1 Proposed biomass supply models for heating plant in Prijepolje ............................................................. 58 5.4.2 Proposed biomass supply models for heating plant in Mali Zvornik ........................................................ 65 5.5 DESIGNING INTEGRATED MODELS OF BIOMASS SUPPLY CHAIN .................................................................. 73 6. SELECTION OF OPTIMAL MODELS OF BIOMASS SUPPLY CHAIN ......................................................................... 78 6.1 PROPOSED OPTIMAL MODELS ................................................................................................................... 78 6.1.1 Optimal supply model for Prijepolje municipality ................................................................................... 78 6.1.2 Optimal supply model for Mali Zvornik municipality ............................................................................... 79 7. CONTRACTING .................................................................................................................................................. 81 Page 2 of 94 DKTI (GIZ) Programme "Development of sustainable bioenergy market in Serbia" Logistics concept of district heating supply with woody biomass (wood chips) in the municipalities of Prijepolje and Mali Zvornik 7.1 MODEL OF CONTRACTS BETWEEN A DISTRIC HEATING PLANT AND A BIOMASS SUPPLIER............................ 81 7.2 MODEL OF CONTRACTS BETWEEN A DISTRICT HEATING PLANT AND OWNERS OF RAW MATERIALS ............. 85 8. OVERVIEW OF OBSERVED SITUATION AND IDENTIFIED LEGALE OBSTACLES ..................................................... 87 8.1 PRIJEPOLJE MUNICIPALITY ................................................................................................................................. 87 8.2 MALI ZVORNIK MUNICIPALITY ............................................................................................................................ 88 9. ENVIRONMENTAL AND SOCIAL IMPACT ............................................................................................................ 90 9.1 ENVIRONMENTAL IMPACT ................................................................................................................................ 90 9.2 SOCIAL ISSUES ............................................................................................................................................... 91 10. CONCLUSIONS .............................................................................................................................................. 92 11. REFERENCES.................................................................................................................................................. 93 Page 3 of 94 DKTI (GIZ) Programme "Development of sustainable bioenergy market in Serbia" Logistics concept of district heating supply with woody biomass (wood chips) in the municipalities of Prijepolje and Mali Zvornik LIST OF ABBREVIATIONS °C Degree Celsius (temperature) CO2 carbon dioxide EUR, € Euro RSD Serbian dinar h Hour ha Hectare kg Kilogram km Kilometre kW Kilowatt kWh Kilowatt hour l litre m Meter m² Square meter m³ Cubic meter MW Megawatt MWh Megawatt hour M Moisture content on wet basis t Metric ton (tonne) bcm Bulk cubic meter th Thermal a Annual PC Public company PUC Public utility company MSW Municipality solid waste HFO Heavy fuel oil Ltd. Limited liability company FA Forest administration office FE Forest estate FMU Forest management unit DHP District heating plant BSC Biomass supply chain PPP Public-private partnership pc Piece Page 4 of 94 DKTI (GIZ) Programme "Development of sustainable bioenergy market in Serbia" Logistics concept of district heating supply with woody biomass (wood chips) in the municipalities of Prijepolje and Mali Zvornik List of tables Table 4.1: Main characteristics of boiler plants in Prijepolje; Source: Municipality Prijepolje Table 4.2: Demand side of boiler rooms in Prijepolje; Source: Municipality Prijepolje Table 4.3: Average fuel consumption